4 statistics that make you rethink your stance on EHR

The ACA’s meaningful use provisions undoubtedly provide the main regulatory driver behind the growth of EHR adoption. This regulatory mandate on health care technology use has also spawned a vibrant debate among economists regarding the “true” economic benefits or costs of EHR adoption.

Much like any other highly politicized debate, one must be cautious of partisan claims regarding either the benefits or costs of EHR adoption. Let us face the facts: One will be hard-pressed to find a person who is neutral on the topic of the ACA, and even more hard-pressed to find one who is indifferent to the idea of the government mandating how medical providers invest in technology.

Much like any other highly politicized debate, one must be cautious of partisan claims regarding either the benefits or costs of EHR adoption.

One manifestation of this divide over the propriety of the government’s role in forcing the adoption of health care technology is found in numerous studies that make the case that EHR is either a boon or a bust for health care. For example, a survey conducted by Quantia MD that posed the question to doctors "Has your EHR been worth it from a quality or efficiency perspective?" shows an overwhelming sentiment that EHR is not a worthwhile investment. In this study, more than 60 percent of doctors reported that they do not consider their current EHR a worthwhile investment. Despite this and other studies that reflect the sentiment that EHR’s promise may be just hype, a number of economic studies present evidence to the contrary.

The long-term ROI of EHR

Claims are often made that the ROI of an EHR simply does not justify the investment. Contrary to this claim, a study published in Health Affairs concluded that solo and small practices can expect to cover the cost of the EHR after 2.5 years, and receive an average of $23,000 per year per full-time employee in net return after that.

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EHR creates efficiency gains

Besides documenting overall gains in ROI, the Health Affairs study referenced above also noted that increased ROI benefits arose primarily from efficiency gains and increases in revenue, which originated from more accurate and higher level coding coupled with time savings attributed to the EHR. Increased coding levels were responsible for an estimated $16,929 per FTE provider per year whereas efficiency-related savings and increases in revenue returns were estimated at $15,808 per FTE provider per year.

The bonus of incentive payments

The benefits conferred by meaningful use incentive payments are often overlooked when making the financial case for an EHR. The tendency to overlook meaningful use incentives may be attributed to misinformation about the program or a perception that the incentive program may be repealed in the future. Under the incentive program, returns on an EHR can be bolstered through reimbursement of a certain percentage of costs depending on the setting and the time spent in the meaningful use program. For example, the incentive program practices can receive as much as $44,000 (through Medicare) or $63,750 (through Medicaid) per eligible health care professional. Eligible hospitals, can qualify for incentive payments totaling some $2 million or more.

Increased reimbursement rates

In addition to the evidence presented above, a 2014 study published in the Journal of the American Medical Informatics Association showed that reimbursements significantly increased after EHR implementation despite a decline in the number of patient visits over a two-year observation period. Revenue gains were caused by the uptick in additional office procedures like drawing blood, immunizations, ultrasounds, and wound care.

Questioning whether an EHR is a worthwhile investment can be answered with a reasonably confident “yes”. Unfortunately, if one is looking for a clear cut answer as to the economic benefits to be gained from your EHR implementation, the answer is largely dependent on the setting and and application.

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Jeff Green

About the author…

Jeff Green, MPH, JD works as a freelance writer and consultant in the Healthcare information Technology Space.

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Jeff Green